Correlation Between Allegiant Travel and Sezzle Common
Can any of the company-specific risk be diversified away by investing in both Allegiant Travel and Sezzle Common at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Allegiant Travel and Sezzle Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegiant Travel and Sezzle Common Stock, you can compare the effects of market volatilities on Allegiant Travel and Sezzle Common and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Allegiant Travel with a short position of Sezzle Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegiant Travel and Sezzle Common.
Diversification Opportunities for Allegiant Travel and Sezzle Common
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allegiant and Sezzle is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Allegiant Travel and Sezzle Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sezzle Common Stock and Allegiant Travel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Allegiant Travel are associated (or correlated) with Sezzle Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sezzle Common Stock has no effect on the direction of Allegiant Travel i.e., Allegiant Travel and Sezzle Common go up and down completely randomly.
Pair Corralation between Allegiant Travel and Sezzle Common
Given the investment horizon of 90 days Allegiant Travel is expected to generate 32.48 times less return on investment than Sezzle Common. But when comparing it to its historical volatility, Allegiant Travel is 11.59 times less risky than Sezzle Common. It trades about 0.03 of its potential returns per unit of risk. Sezzle Common Stock is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Sezzle Common Stock on November 1, 2024 and sell it today you would earn a total of 22,292 from holding Sezzle Common Stock or generate 2073.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.22% |
| Values | Daily Returns |
Allegiant Travel vs. Sezzle Common Stock
Performance |
| Timeline |
| Allegiant Travel |
| Sezzle Common Stock |
Allegiant Travel and Sezzle Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegiant Travel and Sezzle Common
The main advantage of trading using opposite Allegiant Travel and Sezzle Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegiant Travel position performs unexpectedly, Sezzle Common can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sezzle Common will offset losses from the drop in Sezzle Common's long position.| Allegiant Travel vs. Azul SA | Allegiant Travel vs. Alaska Air Group | Allegiant Travel vs. International Consolidated Airlines | Allegiant Travel vs. Sun Country Airlines |
| Sezzle Common vs. Southwest Airlines | Sezzle Common vs. Allegiant Travel | Sezzle Common vs. Thai Beverage PCL | Sezzle Common vs. Copa Holdings SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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